RBI: FTA with Britain will help India

Expansion 

Reserve Bank of India Governor Sanjay Malhotra on Friday welcomed the signing of a free trade agreement with Britain, saying the deal will help several sectors of the Indian economy. Speaking at the FE Modern BFSI Summit in Mumbai, Malhotra said multilateralism has "unfortunately" taken a back seat and the country needs such agreements (like the UK FTA) with other countries as well. He said talks with the US are also in progress. 

Trade agreement with Britain will help both manufacturing and service sectors 

"Hopefully this (FTA with Britain) will help us... This is the way forward now because unfortunately multilateralism has been left behind," Malhotra said in London in the central bank's first comment on the trade deal with Britain. "This will help various sectors related to our manufacturing as well as service sector," Malhotra said. 

It is important for India to enter into such agreements with other countries as well

Malhotra said that given the current realities, where multilateralism has taken a back seat, it is necessary for India to enter into more such agreements with other countries. He said the agreement with the US is in "advanced stages".

He also acknowledged that many more such agreements are in the negotiation stage. India and the UK signed a free trade agreement (FTA) during Prime Minister Narendra Modi's two-day visit to the UK. The agreement has been in the works for several years and will open up markets in the field of goods and services for both countries.

Meanwhile, Malhotra backed his US counterpart Jerome Powell's work to maintain the independence of the Federal Reserve, at a time when US President Donald Trump has publicly expressed his disappointment over its policies. "...he (Powell) is doing a great job. It is very important to maintain the independence of the central bank. I think he has done a commendable job," Malhotra said.